Thursday, March 7–Jim Wyckoff’s Morning Markets Report
OVERNIGHT DEVELOPMENTS
Asian and European stock markets were mostly lower overnight. U.S. stock indexes are also pointed toward slightly lower openings when the New York day session begins.
On the U.S.-China trade dispute front, some downbeat comments from a U.S. trade official regarding the ability of the world’s two largest economies to come to an agreement has somewhat dented worldwide trader and investor risk appetite.
In overnight news, the Euro zone fourth-quarter gross domestic product was reported at up 0.2% from the third quarter and up 1.1%, year-on-year. Those figures were mostly in line with market expectations but show an anemic Euro zone economy.
Traders are awaiting the outcome of today’s European Central Bank regular monetary policy meeting. The ECB is not expected to change its interest rates at this meeting, but ECB President Mario Draghi is expected at his press conference after the meeting to make reference to a more accommodative ECB money policy in the coming months, in order to stimulate the Euro zone economy.
The U.S. March jobs report from the Labor Department is due out Friday morning. That’s arguably the most important U.S. economic data point of the month. The key non-farm payrolls number is forecast to come in at up 180,000. The ADP national employment report for February, released on Wednesday, showed a rise of 183,000, which was close to market expectations for a rise of 185,000.
The key outside markets today see the U.S. dollar index near steady. The greenback bulls have gained technical strength recently. Nymex crude oil prices are firmer and trading around $56.50 a barrel.
U.S. economic reports due for release Thursday includes the weekly jobless claims report, the Challenger job-cuts report, revised productivity and costs, monthly chain store sales, and consumer credit.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are slightly lower in early U.S. trading. The price uptrend on the daily bar chart may now be “rolling over” but right now the bulls have the near-term technical advantage. The shorter-term moving averages (4-, 9- and 18-day) are neutral early today. The 4-day moving average is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are bearish early today. Today, shorter-term technical resistance comes in at Wednesday’s high of 2,798.00 and then at this week’s high of 2,825.75. Buy stops likely reside just above those levels. Downside support for active traders today is located at 2,750.00 and then at 2,730.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-day Market Rating: 4.5
June Nasdaq index futures: Prices are slightly lower in early U.S. trading. Prices are still in an uptrend on the daily bar chart but it may now be “rolling over.” Shorter-term moving averages (4- 9-and 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day average is above the 18-day. Short-term oscillators (RSI, slow stochastics) are bearish early today. Shorter-term technical resistance is seen at Wednesday’s high of 7,198.00 and then at this week’s high of 7,241.00. Buy stops likely reside just above those levels. On the downside, short-term support is seen at 7,100.00 and then at 7,050.00. Sell stops are likely located just below those levels. Wyckoff’s Intra-Day Market Rating: 4.5.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are firmer in early U.S. trading today. Bulls have regained some upside momentum this week. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at Thursday’s high of 145 4/32 and then at 145 12/32. Buy stops likely reside just above those levels. Shorter-term support lies at Wednesday’s low of 144 13/32 and then at 144 even. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are higher in early U.S. trading. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at 122.12.0 and then at 122.16.0. Buy stops likely reside just above those levels. Shorter-term technical support lies at Wednesday’s low of 121.28.0 and then at 121.20.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 5.5
U.S. DOLLAR INDEX
The June U.S. dollar index is slightly higher in early U.S. trading. Bulls have the firm overall near-term technical advantage. The shorter-term moving averages for the dollar index are neutral early today, as the 4-day is above the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the dollar index are bullish early today. The dollar index finds shorter-term technical resistance at this week’s high of 96.450 and then at the February high of 96.685. Shorter-term support is at 96.100 and then at this week’s low of 95.795. Wyckoff’s Intra Day Market Rating: 5.5
NYMEX CRUDE OIL
April Nymex crude oil prices are firmer in early U.S. trading. Trading has been choppy and sideways recently. The shorter-term moving averages are neutral early today as the 4-day is even with the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral early today. Look for buy stops to reside just above technical resistance at this week’s high of $57.19 and then at last week’s high of $57.88. Look for sell stops just below technical support at $56.00 and then at this week’s low of $55.42. Wyckoff’s Intra-Day Market Rating: 5.5
GRAINS
Grain futures were mixed overnight. Traders are awaiting this morning’s weekly USDA export sales report and Friday morning’s monthly supply and demand report from USDA. Grain market bears have the overall near-term technical advantage.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission
(CFTC) has said about futures trading (and I agree 100%):
1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS.
Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
Jim Wyckoff